Why Customer Success is the New Sales

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August 30, 2018


Growing a business with a rapid focus on customer acquisition may have worked in the past, but times are changing. The days of masking problems within the business by simply growing your customer base are over. Sleazy salesmen are a thing of the past, and customer success is starting to matter more than ever.

While it can be tempting to plow all your resources into acquiring new customers and driving further sales, focusing exclusively on new sales is a strategy that strategy can only last so long. Without a proper focus on customer success, customer attrition will start and remain high — and eventually your lack of repeat business will mean that your business flatlines.

Smart businesses are spending more time than ever focusing on ongoing customer satisfaction, digging into data and reviews, and ensuring current and past customers are not just satisfied, but truly happy with the service you’ve provided. And this type of work doesn’t just retain customers — it encourages more word-of-mouth and thus less expensive customer acquisition in the first place!

Customer success, in other words, is the new sales. Here are some reasons why.

Customers Crave Authenticity

In 2018, we are bombarded with advertisements. From sponsored Instagram posts to salespeople desperate to get their monthly commision, the modern day consumer is better than ever at tuning out — and the messages with the “hard sell” are the first to go.

Given the overly commercial messaging of the past few decades, the pendulum is swinging the other way as consumers have shown a marked move toward authenticity. They want referrals, reviews and to hear from other customers who were satisfied with a company’s service.

Word of mouth has become the best form of marketing, and online reviews are easy to come by. While you might be tempted to pay your way in order to boost business, this isn’t a good idea. Instead, work on keeping your customers happy and satisfied - not only might they pass on their good experience to another potential customer, they’re also far more likely to use your brand again in the future.

It’s Less Expensive to Retain a Customer

Acquiring new customers can be a costly process. Facebook ads, Google Adwords and hiring experienced salespeople can add to your costs, and even getting Facebook or Google ads to work with positive unit economics (i.e., a customer acquired is worth more than it cost to acquire them) can be a minefield. You need to be excellent at conversion to make the best of ads work, and even if you do, it will get more and more expensive with decreasing marginal returns as you scale.

What’s not so expensive on the other hand, is retaining customers. What do you need? Well, a happy customer to start - although this should be on your mind from the outset anyway. You’ll also need a social media strategy to keep past customers engaged with your brand, and an email campaign to help check in with them every now and again. Hire the right people, and this needn’t cost you much at all. In fact, those costs should be relatively fixed, as one person can email 100,000 people as easily as they can email 10.

While customer acquisition expenses always scale as you grow, you can benefit from economies of scale much more readily with customer success.

Customer Success Teams can Be Incentive Driven

While many business owners are tempted by the thought of large sales teams who make a commission for bringing in business, thus scaling more rapidly due to incentive alignment between employees and ownership, that benefit isn’t exclusive to sales; customer success teams can also be incentive driven as well.

In order to come up with a solid incentive program, think in terms of key metrics. What are the metrics your company uses to determine if your existing customer base is happy? Do you use NPS scores, or Google reviews? Customer retention or upgrades? Net revenue or logo churn? Once you’ve got a solid idea of what the meaningful customer success metrics are, incentivize around them with bonuses, parties, vacations, or whatever else fits in with your company’s culture!

Low Churn Rates Drive Valuation and Investment

If your business has a low churn (attrition) rate, you’ll have a far easier time attracting investment - more so than if you are constantly adding more customers to your system while others simultaneously drop off. Though churn is a metric primarily used in subscription or recurring revenue businesses, the principles can be applied to all businesses that have potential repeat customers.

Churn is a primary metric used by venture capitalists and acquiring companies because it gives you a great financial picture (you can model the future very easily with accurate churn rates), but it also provides an overall look at product quality and customer success habits when compared with comps targeting a similar market.

Regardless of your total revenue, if your customer doesn’t stick around for long, you’re not going to be in with a good shot of getting investment. Reduce your churn rate (or increase your survival rate), by providing solid customer service, integrating a customer success strategy, and provide ongoing support to your customers to stop them flocking to your competitors for something better.

As companies get bigger, they often lose intimacy with their customers. If you’re not careful, customer satisfaction can drop and before you know it, you’re hit with a multitude of bad reviews and see your sales plummet.

Ensure your customers receive ongoing support and are happy with your product, and, in the long run, you’ll have a great business on your hands.

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About Jaren Nichols

Jaren Nichols is Chief Operating Officer at ZipBooks, for small businesses. Jaren was previously a Product Manager at Google and holds an MBA from Harvard Business School.